Psyringe: He might be just a kid who doesn't know better - I suggest to calmly explain to him that copyright doesn't work like he thinks it does, so that he might learn something. Don't spend more than 5 minutes on it though, since (according to his behavior so far) there's a good chance that any explanations will fall on deaf ears. And yes, I'd definitely report him.
If someone copied an article from me, and was genuinely interested in the content, then I would suggest working something out instead. Cooperations between bloggers are impoprtant to gain visibility. However, in the case you're experiencing, the sad fact is that he doesn't seem to have anything to offer, and his immature behavior makes him a bad candidate for any form of cooperation anyway.
So true, thank you. I'll send him a message via comment on his latest stolen article. Should I tell him that it is against the law and his site could be taken down as well as Google IP banning him from particular services?